Free Trade Today; Free Trade Under Fire
By Jagdish N. Bhagwati, Douglas A. Irwin
Two vigorous and persuasive defenses of international trade. Bhagwati's short book is a revision of three lectures given in Stockholm, in which he provides a spirited riposte to all critics, to whom he pays respect by taking them seriously. He then proceeds to demolish their positions, finding them in logical error, empirically unsupported, or reflecting valid concerns that are better addressed directly rather than indirectly by restricting trade, which would impose unnecessary costs. The book is breezy and nontechnical in style, yet highly sophisticated in content and not easy to absorb without some prior background. It also contains autobiographical flashes and provides an informal guide to the author's own important contributions over the past half-century to the academic literature on the theory of trade and trade policy. It offers an especially cogent attack on the proliferation of "free trade areas," which Bhagwati sees as a damaging diversion from nondiscriminatory trade and a playground (under the guise of liberalizing trade) for mischievous protectionists.
Irwin inevitably covers some of the same ground but is more accessible to nonspecialists. Here he provides an entree to recent empirical literature, which largely demonstrates that most of the charges against free trade do not stand up under serious empirical scrutiny. He offers an especially informative chapter on antidumping duties, which have historically been supported in the name of ensuring "fair trade." In fact, Irwin shows, the manner in which they are executed by the United States (and increasingly by other countries) has introduced an arbitrary, even capricious, obstacle to some imports in ways that routinely violate normal canons of fairness.